Abstract
This paper analyzes the relation between the shadow economy and income inequalities. For transition economies, the share of output produced in the informal economy is positively correlated with income inequalities. This hypothesis is strongly supported by empirical data for 17 transition economies in 2005. Unofficially gained incomes contribute significantly to the increasing income inequalities in post-socialist countries. Additional incomes from unregistered activities are the domain of the richest and the progressive tax system is not strong enough to counteract this phenomenon.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
